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Sequestration: Getting Our Priorities Straight

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Posted on Nov 20, 2013
U.S. Navy/MC3 Paul Kelly

By Sonali Kolhatkar

Lobbyists for military contractors are swarming all over Capitol Hill these days in a frenzy to stave off automatic budget cuts as part of the second wave of sequestration, due in January. If the cuts take effect, the Defense Department will not get its $50 billion increase for next year and will have to make do with a mere $475 billion.

Also included in the sequestration are across-the-board cuts to a comprehensive cross section of government agencies and departments, which, if they go through, could devastate government-funded programs and services ordinary people rely on.

With both major parties unhappy about the sequestration but agreed on reducing spending, the billion dollar question is which aspect of government should we cut? The military budget or just everything else? It is, after all, a matter of priorities.

To understand the current political mess, I asked Jo Comerford, the executive director of the National Priorities Project, to explain the complex origins of the obscurely named sequestration. According to Comerford, the political tussle that resulted in the 2011 Budget Control Act was “all about a battle over debt and deficit, debt being the aggregate number—so every annual deficit combined—and deficit being the gap between what we think we can bring in as a nation in terms of revenue and what we’re going to spend.” Comerford continued, “At that point, in August 2011, Congress and some members of the media were disproportionately focused on our nation’s debt. It was the center of the austerity uprising in the nation.”

That crusade yielded the Budget Control Act, which stipulated that in exchange for raising the debt ceiling, government spending would have to be reduced by about $917 billion over 10 years. A supercommittee of members of Congress was charged with designing the details of the cuts, and if they failed to come to agreement, the newly passed law would trigger a harsh lopping off of both defense and non-defense discretionary spending in roughly equal measure.

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In a reflection of the stark political polarization afflicting Capitol Hill, the supercommittee failed, and the sledgehammer of the “fail-safe” sequestration cuts began to fall. This means that every year, for 10 years, there will be roughly $85 billion-$90 billion in automatic spending cuts from the discretionary budget split between defense and non-defense budgets. The first round went into effect in March and the second round is expected in January.

Advocates of military spending are up in arms, so to speak, over the cuts. But putting the reductions into a broader perspective is a useful exercise. President Obama’s 2014 Discretionary Spending Budget allocates 56.5 percent of our tax dollars to military spending. Meanwhile, the remaining 43.5 percent of the budget includes education, health care, veterans benefits, housing, international affairs, energy, the environment, food and agriculture, transportation and labor, each of which account for only single-digit percentages of the whole pie.

Sequestration, according to Comerford, “does not cut evenly. The Defense ‘bucket’ is so much larger that a cut from that is disproportionately more shallow than a cut from say education.” Conversely, lopping off tens of billions of dollars from the nonmilitary budget levies disproportionately larger cuts to all discretionary spending programs on which Americans rely.

Facing an annual military budget cut of about $50 billion merely forces the Pentagon to prioritize and reorganize spending within an already bloated budget. It may mean, for example, that private military contractors that have been enjoying public subsidies for decades may have to make do with a smaller profit margin.

But the defense industry does not see it that way. Comerford echoed contractors’ fear of sequestration, saying, “Military lobbyists have now for quite some time said that the kind of spending cuts now predicted through sequestration, should it continue, would be terrible for their industry.” For years, the standard economic justification for spending such a big chunk of our national budget on the military has been that it creates jobs.

Comerford blasted that claim, saying, “Military jobs and/or spending in the Pentagon sector is the least effective way when compared with health care, transportation, environment and even tax breaks to create jobs in the nation by the simple fact that military jobs are more expensive than other sectors. So defense analysts and lobbyists who tout the jobs argument are actually missing that huge piece of the puzzle, which is, if you really care about jobs and you want federal investment to boost jobs then we have to go to green energy or transportation or health care—some of the fastest growing, highly employable sectors with so many more commensurate jobs for that same federal dollar than military. That’s just a fact from study after study!” Comerford cited a University of Massachusetts study as one among many that proves her point.


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